Sustainable Produce Urban Delivery Inc. Provides Going Public Details and Business Update
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Sustainable Produce Urban Delivery Inc.
Provides Going Public Details and Business
Update
NEWS PROVIDED BY
Sustainable Produce Urban Delivery Inc. (SPUD)
Apr 12, 2021, 12:45 ET
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAWS./
VANCOUVER, BC, April 12, 2021 /CNW/ - Sustainable Produce Urban Delivery Inc. ("SPUD") is
pleased to provide updates on its going public transaction, business activities and nancial
results.
As announced in a separate joint press release from Rainy Hollow Ventures Inc. (TSXV: RHV.P)
("Rainy Hollow") and SPUD today, Rainy Hollow has received conditional approval from the TSX
Venture Exchange (the "TSXV") in respect of its qualifying transaction (the "Transaction") with
SPUD pursuant to Policy 2.4 - Capital Pool Companies of the TSXV. In connection with the
Transaction and pursuant to TSXV requirements, Rainy Hollow has led a ling statement
dated April 9, 2021 (the "Filing Statement") on SEDAR (www.sedar.com). Concurrently with the
Transaction, Rainy Hollow intends to change its name to "Freshlocal Solutions Inc." and upon
completion of the Transaction, the combined entity (the "Resulting Issuer") will carry on the
current business of SPUD. The Toronto Stock Exchange (the "TSX") has also conditionally
approved the listing of the common shares of the Resulting Issuer following the completion of
the Transaction. Final approval of the listing is subject to the Resulting Issuer meeting certain
conditions required by the TSX, these conditions include the completion of the Transaction and
other standard listing conditions. Upon receipt of the TSX's nal approval, the common shares
of the Resulting Issuer will begin trading on the TSX under the symbol "LOCL".
SPUD is pleased to report its audited annual nancial results for its 2020 and 2019 scal years,
as well as its unaudited interim nancial results for Q1 FY2021. All amounts in this press release
are in Canadian dollars. Summarized results are shown below:
Financial Highlights
Three months ended Year ended
All amounts in CAD $ millions except Average Customers, Average January 2, December October 3, September
Order Size, and Same Store Sales 2021 28, 2019 Change 2020 28, 2019 Change
Consolidated
Revenues $ 31.9 17.8 79% $ 107.6 76.5 41%
Gross Profit1 11.7 6.4 82% 38.5 26.1 47%
Net Loss (15.9) (5.1) (30.7) (18.6)
Per share (0.45) (0.14) (0.86) (0.53)
1
Adjusted Operating Loss (2.4) (3.0) (10.7) (13.7)
Cash Flow Used in Operations (5.0) (6.7) (6.8) (12.5)
eGrocery Business Segment
Revenues 25.0 11.5 118% 78.0 49.6 57%
Active Customers 1,2 29,559 17,962 65% 27,122 15,183 79%
Average Order Size 1 140 116 21% 115 95 21%
Blush Lane Business Segment
Revenues 9.5 7.5 25% 37.5 31.6 19%
Same Store Sales1 25% (16%) 19% 4%
1. Please refer to "Metrics and Reconciliation of Non-IFRS Financial Measures" at the end of this document for further details.
2. Active customers is based on the number of individual customer accounts that have completed an order on SPUD's eCommerce platform in the past
90 days, measured as of the period end noted.
The nancial information above relating to the scal years ended October 3, 2020 and
September 28, 2019 and the rst quarters ended January 2, 2021 and December 28, 2019
should be read in conjunction with (i) the audited consolidated nancial statements of SPUD
for the years ended October 3, 2020, September 28, 2019 and September 29, 2018; (ii) the
management's discussion and analysis of SPUD for the years ended October 3, 2020,
September 28, 2019 and September 29, 2018; (iii) the unaudited interim condensedconsolidated nancial statements of SPUD for the three-month periods ended January 2, 2021
and December 28, 2020; and (iv) the management's discussion and analysis of SPUD for the
three-month periods ended January 2, 2021 and December 28, 2020, respectively, copies of the
foregoing documents can be found in Exhibits "C", "D" "E" and "F" of the Filing Statement, a
copy of which is available on Rainy Hollow's SEDAR pro le at www.sedar.com.
Business Highlights
Business Highlights for FY2020
Carrefour Strategic Partnership: In July 2020, FoodX, a wholly-owned subsidiary of
SPUD, announced its rst global sale of its end-to-end SaaS-based eGrocery Management
Solution ("eGMS") to a wholly-owned subsidiary of Carrefour S.A. for implementation in the
Belgium market. Deployment is expected to be completed within 2021.
FoodX Secures Meridian Farm Market as a New Customer: In November 2020, SPUD
announced its strategic partnership with Vancouver's Merdian Farm Market to deploy its
rst mid-market end-to-end eGMS platform. Deployment is expected to be completed in
late 2021.
Strategic Alliance with Attabotics: In June 2020, FoodX announced a strategic alliance
with Attabotics Inc., a leader in the design, manufacture, and implementation of 3D
robotic supply chain systems. The alliance is focused on the implementation of Attabotics'
technology at FoodX's ful llment centres and partner ful llment centres across the globe.
The companies also intend to further explore mutual business development and project
opportunities based on their combined capabilities.
Key Leadership Team Additions: SPUD announced important additions to its corporate
leadership team, including Jeffrey King as Chief Technology Of cer and PJ Stafford as Vice
President, Business Development of FoodX. SPUD also appointed grocery industry
veterans Walter Robb and Daryl Porter as members of its corporate advisory committee.
Business Highlights for Q1 FY2021, and the Period Subsequent to the Quarter End
Financings (private placements): In October 2020 and December 2020, SPUD
completed a $15.5 million private placement of convertible debentures and a $24.2 million
private placement of subscription receipts, respectively.
Successful efforts to strengthen SPUD's access to capital to fund its growth: As part of
SPUD's efforts to strengthen its nancial liquidity, on March 12, 2021, SPUD entered into an
agreement with Silicon Valley Bank for a secured revolving loan facility of up to $15.0
million, which will become effective at the closing of the Transaction.
Carrefour Equity Participation Right: In April 2021, Carrefour S.A. entered into an
Amended Equity Participation Right Agreement (the "Agreement Equity Participation")
pursuant to which Carrefour S.A. was granted the right to purchase up to 9.9% of the
Resulting Issuer common shares on an undiluted basis, calculated on a post-issuance
basis, issued and outstanding at the time of exercise of such right (the "EPR"), upon
payment of a price per share equal to a 15% discount from the market price at the time
the EPR will be exercised. The EPR is subject to the completion of the Transaction and the
execution of a new SaaS agreement with Carrefour S.A. or one of its af liates in the
European territory contemplated in the Equity Participation Agreement. In the event that
Carrefour S.A. exercises the EPR and purchases 9.9 % of the then issued and outstanding
of the Resulting Issuer shares, and as long as thereafter Carrefour S.A. holds together with
its wholly-owned af liates not less than 7.5% (5.0% in certain circumstances described in
the Equity Participation Agreement) of the issued and outstanding Resulting Issuer
shares, Carrefour S.A. will be entitled to nominate one individual for appointment or
election as a director of the Resulting Issuer. Additional details relating to the Equity
Participation Agreement are outlined in the Filing Statement.
"As we approach completion of our important rst eGMS deployment in Europe with Carrefour,
we are excited to announce the extension of our relationship through the Carrefour Equity
Participation Agreement," stated Peter van Stolk, CEO of SPUD. "The important business
development steps we have taken, along with our recent full-year and quarterly results, clearly
demonstrate the progress we're making throughout our business and provide a strong
platform on which we can continue to build out our FoodX eGMS business."
About SPUD
SPUD is a Vancouver-based company that is building a leadership position in the provision of
end-to-end grocery e-commerce solutions. SPUD operates two primary businesses, FoodX and
eGrocery, both of which support its corporate mission to leverage innovation and technology to
create a sustainable and pro table food system for all. FoodX Technologies ("FoodX") is SPUD's
scalable end-to-end SaaS-based eGrocery Management Solution (eGMS) which is designed to
meet the needs of large and small grocery retailers while providing pro table unit economics.
The FoodX eGMS is the culmination of 20 years of experience in online grocery and the
company's proven track record of delivering ef ciently, sustainably and pro tably. SPUD's
consumer eGrocery business has expanded into one of Canada's largest online grocery
companies, with a focus on delivering fresh, local, organic produce and groceries, along with
exceptional customer experiences. SPUD serves the main urban markets in British Columbia
and Alberta through its brick and mortar store locations operating under the Be Fresh and
Blush Lane banners, as well as through SPUD.ca which is SPUD's award-winning online
eGrocery platform. For more information, please visit http://spud.ca.
Notice on Forward Looking Information
Certain statements and information herein, including all statements that are not historical
facts, contain forward-looking statements and forward-looking information within the
meaning of applicable securities laws. Such forward-looking statements or information
include but are not limited to statements or information with respect to: the terms and
conditions of the Transaction, including receipt of nal TSXV and TSX approval; the closing of
the Transaction; and the listing of the Resulting Issuer on the TSX. Often, but not always,
forward-looking statements or information can be identi ed by the use of words such as
"estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should"
and the negative of these words or such variations thereon or comparable terminology are
intended to identify forward-looking statements and information.
With respect to forward-looking statements and information contained herein, Rainy Hollow
and SPUD have made numerous assumptions including among other things, assumptions
about general business and economic conditions of SPUD and the market in which it
operates. The foregoing list of assumptions is not exhaustive.
Although management of Rainy Hollow and SPUD believe that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: risks relating to the receipt of all requisite nal approvals for the Transaction, including TSXV and TSX; nal approval of the Resulting Issuer's listing application by the TSX; risks associated with the business of SPUD; business and economic conditions in the eGrocery industry generally; the supply and demand for labour and other project inputs; changes in commodity prices; changes in interest and currency exchange rates; risks relating to unanticipated operational dif culties (including failure of technology or processes to operate in accordance with speci cations or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters); changes in general economic conditions or conditions in the nancial markets; changes in laws; risks related to the direct and indirect impact of COVID- 19 including, but not limited to, its impact on general economic conditions; the ability to obtain nancing as required; and other risk factors as detailed from time to time. Rainy Hollow and SPUD do not undertake to update any forward-looking information, except in accordance with applicable securities laws. Cautionary Statement Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV or TSX acceptance. There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular of SPUD or the Filing Statement of Rainy Hollow prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Rainy Hollow should be considered highly speculative.
Neither the TSXV nor the TSX has in any way passed upon the merits of the proposed
Transaction and has neither approved nor disapproved the contents of this news release.
Neither TSXV nor its Regulation Services Provider (as that term is de ned in policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this release.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of
the securities in the United States. The securities have not been and will not be registered
under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any
state securities laws and may not be offered or sold within the United States or to U.S.
persons unless registered under the U.S. Securities Act and applicable state securities laws or
an exemption from such registration is available.
Metrics and Reconciliation of Non-IFRS Financial Measures
SPUD uses metrics and non-IFRS nancial measures for which a complete de nition is
presented below and for which a reconciliation to nancial information in accordance with
IFRS is presented later in this section. These measures should be considered as a complement
to nancial performance measures in accordance with IFRS and to provide further
understanding of SPUD's operating results from management's perspective. They do not
substitute, are not superior to them and do not have any standardized meaning prescribed
under IFRS and therefore may not be comparable to similar measures as presented by other
issuers.
Non-IFRS Definition
Metrics
eGrocery The eGrocery Average Order Size ("AOS") is defined as total sales net of returns and credits, divided by the number of orders made for the
Average period. SPUD believes that AOS is a useful metric for readers because it is indicative of eGrocery adoption, consumers expanding their share
Order Size of purchases made online and the strength of SPUD's online consumer business.
Active Based on the number of individual customer accounts that have completed an order on SPUD's eCommerce platform in the past 90 days,
Customers measured as of the period end noted.
Same- Retail segment sales from the same location for stores in operation in that location in both periods.
store sales
Non-IFRS Definition
Financial
Measures
Adjusted Adjusted operating loss represents net income or loss before net finance expenses (income), depreciation and amortization expense and
operating stock-based compensation expense. SPUD believes that this is a more representative measure to monitor its operational results.
loss
Gross Gross Profit represents revenue net of returns and credits less cost of sales.
Profit
The nancial information has been prepared in accordance with IFRS. However, nancial
measures used, namely adjusted operating loss and gross pro t for which a reconciliation is
presented in the following table, do not have any standardized meaning under IFRS and could
be calculated differently by other companies. Those measures may not be comparable to
similar measures described by other companies, as IFRS does not have standard de nitions for
these measures. These measures should be considered as a complement to IFRS measures and
for further understanding of SPUD's operating results. Readers should use these non-IFRS
measures in conjunction with the IFRS nancial statements for each applicable period.
SPUD believes adjusted operating loss is a useful measure of nancial performance to assess its
ability to nance its ongoing operations, service its debt obligations and capitalize on
expansion opportunities. Gross pro t is used to assess the ability of SPUD to increase sales and
control its cost of sales via strategic purchasing.
This section presents a reconciliation of nancial information in the unaudited interim
condensed consolidated nancial statements of SPUD for the three-month periods ended
January 2, 2021 and December 28, 2020 to the non-IFRS measures above.
The following tables summarize non-IFRS measures used above for the three-month periods
ended January 2, 2021 and December 28, 2019.
Adjusted Operating Loss
Quarter ended (In thousands of Canadian dollars) January 2, December 28,
2021 2019
Net loss and comprehensive loss $(15,924) (5,148)
Net finance expense 12,095 1,015
Depreciation and amortization expense 1,121 1,069
Stock based compensation expense 322 77
Adjusted operating loss (2,386) (2,987)
Gross Pro t
Quarter ended (In thousands of Canadian dollars) January 2, December 28,
2021 2019
Revenue $31,872 $17,842
Cost of sales (20,187) (11,417)
Gross Profit 11,685 6,425
This section presents a reconciliation of nancial information in the audited consolidated
nancial statements of SPUD for the years ended October 3, 2020 and September 28, 2019 to
the non-IFRS measures used above.
The following tables summarize non-IFRS measures used above for the years ended October 3,
2020 and September 28, 2019.
Adjusted Operating Loss
Year ended (In thousands of Canadian dollars) October 3, September 28,
2020 2019
Net Loss and comprehensive loss $(30,722) $(18,561)
Net finance expense 14,020 910
Depreciation and amortization expense 4,561 2,488
Stock based compensation expense 1,457 1,449
Adjusted operating loss $(10,684) (13,714)
Gross Pro t
Year ended (In thousands of Canadian dollars) October 3, September 28,
2020 2019
Revenue $107,561 $76,528
Cost of sales (69,043) (50,380)
Gross Profit $38,518 26,148
SOURCE Sustainable Produce Urban Delivery Inc. (SPUD)
For further information: Sustainable Produce Urban Delivery Inc.: Media Contact:
media@spud.ca; Investor Relations: Ian S. Tharp, CFA, (416) 567-2563, ir@spud.ca
Related Links
http://www.spud.ca
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